Welcome to The Pipeline.

There are two trends unfolding of in sales which to date have accidentally intersected, which should be proactively encouraged and facilitated by B2B sales organizations. The first not so new, but gaining and likely to continue to gain momentum in the coming years, is the migration by many to inside sales teams, especially types of sales that only a few years ago may not have been seen as feasible for a number of reasons. However given the advances in technology, specifically web meeting and collaboration related apps, it is now more economical, and often leads to a more effective exchange between buyer and seller. Beyond the cost factor of time for both, including travel time for the seller, sharing screens can not only allow for a more thorough exploration of issues, but there is also the ability present your product in a more fluid and contextual manner, without coming across like a heavy handed demo.

The second is newer, although given the incessant hype it just seems like it’s been hanging around for ever, is social media and social applications. While many struggle to define social selling, often resorting to contrasting it to “traditional” selling, most applications are not really new, just executed using new tools.

Taking advantage of social tools and a social approach does present an opportunity compensate for some of the differences between selling face to face, and selling remotely, I would go as far as to say you can fill or avoid some potentially risky gaps in inside/remote selling. Specifically the type of social interaction that directly occurs when you interact with people directly. Not so much between the seller and those people directly involved in the steps of the buy/sell, but more importantly the supporting cast. The receptionist, the EA, the tech support person who helps you when you are visiting.

Visiting being an important concept here. It is no surprise that many “old timers”, regularly interchange the word appointment with visit. There is a lot of to be gained via the social interactions that can be gained while “visiting”.

There are whole bunch of conversations that will never take place when selling remotely that are just part of a visit to a prospect or client. These conversation may not always pertain to the product, or the purchase itself. In fact many of these conversation will happen with people who are not part of the process, but are tuned in, and in a number of ways that sellers can find valuable and move the sale forward. Small talk can add up to a lot.

The social fabric of a company, and the social fabric of the sale is an important component. Especially in an economy where products are interchangeable, but where people are not. In an economy where many senior leaders are more likely to choose one product over another primarily due to consensus among “the group”. The buying group, the user group, the implementation group, and others. Often this consensus is driven by things other than specs and features, and more by things that evolve out of “social interactions”; you know, people buying from people. These secondary relationships are often the little things that give you an edge over a competitor, the ability to influence just a bit more.

So what happens when the opportunity for small talk and hallway conversations is gone? You turn to social. There is a host of information one can glean and utilize to make up for not being there. The art then is to leverage it during the sale. And while most sale people are good at doing this face to face, the phone limits their focus. But there is no reason you “have to rush by” the receptionist just because you are on the phone. It is up to us as professionals to “humanize” the remote selling experience for all parties.

Even if you have your “targets” direct number, there is no reason you can’t hit zero and speak with the admin or receptionist, you’d talk to them if you were there, it is up to us to “be there” even when remote, and you can do that by learning more about them from their Facebook page, tweets, Pinterest, and host of other sites that give you a window to the non-business person. LinkedIn can help you connect the dots between the players, I learn more about the person on other platforms. There is no law or reason why you cannot incorporate this into your selling, and make up for the lack of being there, change something potentially impersonal to something more personal, for the people at the prospect company, and for you. In fact you can bet that they are checking you out the same way, and making assumptions and decisions based on these things.

So while social is great for the current lead gen and sale, it has loads more value and application in actually preserving and enhancing the social side of any sale.

As part of a series of posts dealing with areas you should consider, better yet reconsider, going in to the New Year, today we look at incentive. No doubt everyone should be thinking about commissions, after all is in effect the cost of revenue. While there are other expenses, commissions/incentives, are the most direct “payment” you pay for bringing in revenue.

While there have been variations, updates and paint over through the years, little has changed in how and what you pay for.

In this article I penned for November issue of Sales and Service Excellence Essentials, I challenge and suggest an alternate way to spend incentive cash, and actually driving right behaviours that lead to results (revenues), and actually sustain both.

Take a read, let me know what you think, pro or con, some will call me names, others will want to pick up the phone and call me to discuss. In the end it’s your money, you should always be open to investing it more productively.

As the next instalment in this week’s posts dealing with kicking the New Year off right, meaning in a way that will help sales organisations and teams exceed quota in 2015. Below is an expert from that discussion, but I encourage you to take in the full discussion by clicking here. It is a lively and insightful discussion that will provide a number of ideas for helping your team crush their number.

I, like many in my profession have a unique perch when it comes to looking at sales. We are actively selling, and as a result face many of the challenges and opportunities our customers do. But we have two added bonuses that many don’t. First is that we get to see how a host of sales organizations deal with specific aspects of sales, while any one of my customers may know more about how they sell, and why they are good, and what they want to develop, I have the benefit of seeing a range of best practices. I can see what works, what doesn’t, and what almost does and would with a bit of focus and development. Second, I can take the above and continuously synthesise into better methods, better execution and better development.

With that I, and I am sure many of my peers, have come to learn that is that budget cycles and development cycles are rarely in synch. How organizations deal with this is often the difference between great sales companies, and a bunch of also-rans.

Certain habits and changes take more than 12 moths to evolve, sales culture, processes and habits are one, but most companies spend silly time tying one to the other. This time of year, budget and planning time, really highlights that. One company I have been engaged with for some time is an example of how not to do it. They have decided that based on current numbers, they will need to cut budget for 2015, and her words, not mine, “training is on top of the cutting list”. I’m game, I asked, and “what forced you to cut?” You know what they said, lack of sales, “and the pipeline is weak going into Q4.” But she did ask me to call at the end of Q1, “maybe the numbers will improve”. Now I know what you are thinking, but I have been through this before, with them, they tie development to budget, not making the link to the possibilities of going the opposite way, budgeting the development.

By contrast, I have clients who do not want to hear about anything less than a 24 to 36 month plan. Their growth plan is to go form the current revenue $350 million to $1.8 billion, three years. Not unusual to have a three year plan, but they also tie the development plan to three years, along with targets, incentive and what I and my peers bring to the table. Their cost is not greater, it is just amortized, differently. Their development is not governed by budgets, but their budgets are driven by development.

It is funny how the same people look at other assets and are able to spread the cost and return expectations over the life of the asset, but when it comes to training they get hung up. Not training due to budget issues, is like not fueling up the truck due to the same budgetary reasons.

I know some are thinking “it’s different” (isn’t always when it comes to rationalizing) “other assets can’t get up and leave, what happens if I train them and the leave”, and many of you have heard y answer to that before: WHAT HAPPENS IF YOU DON’T TRAIN THEM AND THEY STAY?

We are all familiar with the battle cry of many in sales: People Buy From People. This is all well and good (if not always true), it does not always turn out the way some expect. Specifically for sales people who believe they have such a tight relationship with their buyers that they tend to ignore things that can cost them revenue and clients.

In a more specific way, it does not translate when it comes to sales people who think they own the account, and that the account will follow them no matter where they go. We have seen companies hire sales reps less for their superior selling skills, and more for their “book”. Worse we have all dealt with sales people who jump to competitors, extracting concessions in the form of bonuses, or compensation based on the fact that they will bring their book with them. But the reality more often than not, is that most of the book stays put.

I remember reading the results of a purchasing manager’s survey, which detailed that they, purchasing managers, prefer to deal with sales people who can demonstrate that they can access and deliver their company’s broad resources. While this may bode well for some sellers, it flies in the face of lone wolves, or those who want to be the centre of the deal, rather than the facilitator. Sadly a high percentage of those who would barter their “book” or think they are the pied piper their clients will blindly follow.

What it also highlights is that savvy buyers will usually put more stock in the company they deal with than the person parked in the territory at the time of the deal. Again, this is not universal, but if they see more contact from the company in forms other than the sales person, they usually see themselves as clients of the company, not the rep. Here is a reality, they get an invoice from the company every month, if the rep is present less than that, the relationship will belong to the company.

Someone recently shared an interesting stat relating to client habits, they cited stats that showed only that only 10% of customers will actually switch when given a rate increase due to the high cost of change. That cost does not go down if the rep switches, the considerations remain the same, if they are benefiting from the service, they will stay. While loyalty is big, that loyalty is greater for the company than any given individual, including the sales rep. Let’s not forget that the same people who will tell you they can bring their book, are the same ones that tell you the Status Quo rules supreme.

While people buy from people, clients deal with and stay with companies. Clients are not lemmings, they know what is in their best interest, and stay loyal to that, and that is rarely based on one individual or relationship.

While Labour Day may be behind us, it is still too early to put the golf clubs away, or to take in a tournament or two on the television. I am not much of a golfer, they have banned me from a number of courses on suspicion that I was there to set the world’s record for size of divot. What is interesting when you watch the pros is their reliance on their direct and extended team, while they may strike the ball alone, their caddy is right there on the battle field, intimately involved in key aspects of the game, and the outcome, be it a win or a loss.

While many sales professionals play golf, they don’t allow that kind of thinking to enter their day to day selling. While they are open to help, input and support on the links, they often turn away from or refuse help on the sales field. They are open to suggestions from their managers, or respected peers, but when the time to “play” comes, they tend to want to go it alone. No what you would expect, given that they carry the revenue responsibility for their companies. The best reason I can think of for this is ego, a necessary but not singular sales skill or trait.

I say this because I remember sitting with a VP of Sales some time ago, he understood he need outside help, felt that we could collaborate, but was reluctant to commit. When I asked why, he said:

VP: “If I bring you in, what does that say about me?”

He is not alone in thinking like this. On a regular basis I hear VP’s say, “Well that’s what they pay me for”, or something to that effect. The same lone wolf superman outlook many of his reps had, they didn’t need anyone telling them how to things, that would be a sign of weakness, not good for the ego; they can continue to bring in 95% of quota on their own, they don’t need help doing that, thank you.

As for the VP, I think that they are paid to drive performance, behaviour and success, I am not sure the intent is for them to do it all, strategy to tactical roll out and execution, hiring the right resources, internal and external, are like closer to the mark.

There is often a sense that if they hadn’t been able to drive a set of behaviours or to get the team to adhere to the sales process, it is a case of the people not getting it; rather than maybe the VP’s skills are vision, strategy, the ability to align that strategy with other internal departments, and buyers, gather a team who understands the strategy and has the means to execute the tactical steps needed to succeed, and make the VP look good, and stroke that ego.

Which is the realization the VP above had when I responded to him:

VP: “If I bring you in, what does that say about me?”

ME: “Well even Tiger Woods has a caddy”

He got it, his ego was able to deal with it, and more importantly the outcome, success, greed, recognition trumped, and in fact feed his ego.

Sales like any other craft takes practice, evaluation, more practice, repeated coaching, and just when we think we have it down, we need to practice some more; and then things change, which means we get to practice some more.

I recently saw Robert Greene, author of The 48 Laws of Power, and Mastery, discussing what it takes to become a master at something. One thing he pointed to was the effectiveness of the “apprenticeship” programs developed as far back as the middle ages. Specifically, that the years of apprenticing, the constant practice of the craft, led to the critical number of 10,000 hours of active practice and execution that led to mastering the craft. A concept later popularized by Malcolm Gladwell. Of course those who truly mastered their craft kept practicing and improving throughout their career, building on the 10,000 hour base, not resting on it.

Consider that in North America, there is an average 1,760 hours of active sales time. Add to that many studies peg the amount of active selling time for B2B reps from a low of 15% to somewhere just under 50%. Going with the 50% range, it means that a committed sales person will take almost 12 years full time selling to hit that 10,000 hour mark.

Given that most sales people are only evaluated by the results, rather than the quality of the effort, it often clouds how effective their apprenticeship is. Often they make quota for reasons other than sales ability, market conditions, weak or easy quotas, and more. Many sales people are unleashed on the buying public well before they are ready to succeed for their clients, companies, and most importantly for themselves.

Add to that many are offered little training or leadership in their formidable years (which again could be their first 12 years on the job). Based on stats, only about half of B2B companies offer formal sales raining, and some that think they are delivering sales training, are in fact focused on product training, or order processing training. You can find other interesting stats by reading Why a Lack of Sales Training is Hurting Your Company–and What to Do About It.

Many sales leaders who don’t hesitate to cuss out the manager of their favourite sports team for being slack on training or practice, will regularly tell me that their people do not require training, “my people have five, ten, 12 years of experience”. When I ask if that is ten years of continuous growth and improvement, or the same year ten times over, I either get a silent look or the door. None of which changes the fact that only about 60% of reps made their quota based on the latest studies. Many of those are repeat achievers, and still employed by the same company. On an individual level, very few sales people will pick up and read a sales book a year, and then put into practice the things they read, next time you are interviewing the next superstar, ask them what the last book they read was.

The great thing about apprenticeship is it was a proactive approach to ensuring one was qualified based on practice and experience and supervised coaching, all leading to the perpetuation of the craft and a flow of qualified craftsman. Something available and mandatory for other mission critical roles in most enterprises in the form of Continuing Education, often tied to licences and keeping their job. A standard that would not be bad for sales either.

In the past I have written about the propensity of sales leaders to accept and live with the Pareto Principle, the 80/20 rule. For example, 20% of your reps deliver 80% of your revenues, I know one team with 9 reps, where 2 sellers are responsible for 71% of the revenue. At one time, in the Shanto Principle I asked the question what if organizations could move the dial to 70/30, what would the impact be?

Companies continue to struggle with this reality, in many instances the 80/20 looks more like this:

20% – Top of the pack, consistently successful, adaptive and responsive to market movements, often spearheading the change in sales that are required to keep and win more business.

55% – Steady players, not always winning, or delivering 100% of plan, but put in a steady (just enough) effort to be in the 70% – 90% of plan zone. Room to improve, but bad enough to fire (although you have to wonder).

25% – Perennial underachievers. Steadily underperforming, while you don’t invest time in them, they are still part of the team. While you know you should fire them, you give in to the voice that says they are better than nothing, while I look for a replacement.

You may think that the above is a variation on the traditional A, B, and C player model, many do, which is a mistake.

I strongly suggest that you look at it more like:

A Players – The top 20%, Group 1

B Players – The top half of the 55%, Group 2

C Players – The bottom half of the 55%, Group 2 X Players – The bottom 25%, Group 3

I have always argued that leaders should focus their time and attention to the A players, show the most love to those you want to lose least. Show no time or attention to the C Players; the lack of attention clearly communicates that they either need to adopt and contribute, make their way up to B status, in order to get attention, or move on to organizations. The B’s need to be put on a path to achieve A status. NOTE: this is once the sales rep has been on-boarded, trained on your systems, and integrated into the process. This could be as little as three months, or as long as a year, but there does come a point where they need to deliver on their own. I still stand by this, but have ratcheted things up a bit, by encouraging you to not waste time, resources or emotion or keep that bottom 25%, the X Players. Rather than pretending that they are C players, suggesting some hope, when in fact they are a toxic waste in your sales organization, meaning you have to dump them ASAP.

Accepting the Status Quo, (yes, we do it too), is riskier than many sales leaders want to pretend, and here is why. Any way you slice it, the majority of the sales team is missing quota. It is true that more sales teams collectively are making quota, even while most individual contributors are not. What is the take away for those on the team who continuously are missing targets? Sales teams are like any other collective of people, there is a perception of majority rule, and if the majority is not making quota, then that soon becomes the norm. Not something sales leaders should encourage or tolerate, but by not acting quickly and strongly to end that, it soon becomes the norm, and worse.

If more than 50% of the team is not making quota, rationalizing becomes easy; “it’s not me, it’s the product”, “it’s the price”, “it’s the whatever”. “After all, look at all the people who are also in the same boat, it can’t be me”. Those few that are making quota, well they become the anomaly, the pack will stick together to comfort their own, and ostracise the others.

One of the top priorities of a sales leader, and their managers, has to be to ensure that at the minimum, more than half of the team exceeds their quota. This needs to be done across the whole organization, and by each front line manager locally with their teams; having a patch quilt of teams that do and don’t is not acceptable. While ultimately we want everyone to make their goal, this is a start; 50% plus of each team, and 50% plus of the whole organization.

How do you do that, a simple upward rotation is a good start. Not only do you heavily reward success, you simultaneously punish failure. Start with the of 10% rule, every year fire the bottom 10% of each team, not just the entire sales organization, but on each team managed by a front line manager; and if they have two teams, fire the bottom 10% from each team. Many are often reluctant to do this, telling me they can’t afford to have a vacant territory, if you ask me, the opposite is true, you can’t afford having territories run by these X Players. You can’t afford having your clients be attended to by these X Players. By the way, you don’t have to wait for the end of the year. If they are not executing the activities required to win, it will not take a year to realize things. One company I know fires those who are in the bottom 10% three months running. They are transactional, and can tell early, you may need to wait the year, or not. You just need to ensure that the period you choose allows for slumps and temporary factors that you can address and correct.

As this pruning takes place, especially as it becomes the declared policy, you’ll find that those in the middle of the pack begin to self-correct and do things that drive them ahead, realizing that as the bottom is lopped off, they either move higher or face being the next to go. This upward rotation pays dividends across the team, the C’s and B’s begin to move up, and the A’s realize they have company, and their personality trait kicks in, and they improve their game to maintain the gap with the B’s. Lifting your results to higher and higher levels. You may even find after a few years of this approach that you do more with less players; alternatively, expand products and markets with a more qualified and talented team.

Once you get to where more than 50% of the organization is making goal, the dynamic switches. Rather than people rationalizing why they are not making quota, after all those who are not are now in the minority, people look for ways to make and exceed quota, and begin to share their best practices. Majority rule! If you do find yourself in an enviable position where all you reps are making or exceeding goals, may still be a viable way of ensuring continuous improvement and growth.

This may seem a harsh route, but as leaders, that’s why we get the big bucks, for big decisions and big differences. Any way you look at it, it will never be as harsh as having to explain the alternative to the executive committee.

If you are in sales you have likely seen or participated in a discussion about whether sales training works or not. You have likely heard that it works when there is follow-through, or if there is buy in from front line sellers, or the degree to which management is committed to supporting the new training. While these and other factors do play a role, I see a variation the last point as key.

While most have framed their reasoning and discussion around the argument of
management/leadership commitment, I believe it comes down to something more profound
and less often discussed, intent.

Just as intent will differentiate sellers in their buyers’ eyes, intent is more often than not the determining factor is sales training success. Many companies embark on a training program because it is one of the things they (feel they) have to do. While there is the underlying understand that training is a good thing and does lead to improvement at some level, it is often something that is done to satisfy a KPI, or is one of the things that was an initiative on the calendar for that fiscal year.

I recently was involved in a discussion with a company that typified this approach. Several times we talked about the “need” for training, but when we tried to dig down and understand what were the specific objectives for the initiative, the discussion was held to a superficial level. Any attempt to understand what the underlying factors were, how they wanted to see the team be different as a result of the initiative were met with generalities, “more revenue”, “better interactions”, “more profitable relations”, and more.

When we tried to take the discussion to a deeper more specific level, we met with surprise about the questions, and told that it was part of a greater plan. We felt that if we were going t contribute to their success, it would be integral for us to understand the plan, what had already been addressed, if or how was it adopted, we were met by surprise for the question, rather than specific answers.

As part of any engagement we like to meet with reps and managers in advance, as an informal assessment (we often will conduct formal assessments), yet this is at time seen as a foreign request. When it is, I have become suspicious about the intent and nature of the commitment. It is as though they were telling us that the important thing is to have training, not necessarily to help the team sell better.

To me if the intent going in is wrong, the results will not be far from that either.

Next Step

Understand what specifically you intend to get as a result of any training

Spend longer sourcing the training than it takes to deliver it

Share your goal with the chosen training partner in advance, not after

Based on some feedback, I want to expand on some key points and make sure that the wrong message is not being taken away.

With respect to KPI’s and training, I was not saying that KPI’s do not belong as part of training initiative. In fact there needs to be metrics, measures and other indicators to ensure that the training is effective, implemented and is delivering the desired behavioural change. Those same indicators should then be utilized to refine training strategy and implementation. What I was saying, and don’t apologize for, is that sales leaders need stop making decisions on training in order to meet one of their KPI’s. Not only does this not result in training that moves the dial forward, but more importantly communicates a clear message to their sales teams. The message is that it is OK to just go through the motion to meet the basic requirement without regard for the end result. After all, if the VP can get by with training that does not change sales behaviour, than why can a rep take a similar view, “you wanted five face to face visits, you got five”; KPI met, sale or not.

The question of alignment extends in to training as well. Just as you don’t want to misalign the resources based on the type of buyer involved, you also don’t want to assume that all your sales people will benefit from the same type of training. I have written in the past that there needs to be no democracy in sales training. Indeed, when it comes to sales training, one size does not fit all. Many have taken a forward step of separating new recruit training and some form of “advanced” training; others created online programs better matching requirements and content. When actively managed this moves things in the right direction, when not, which is often the case, this type of training just invites the KPI mentality highlighted above. This happens eve when there is testing built into modules.

In the end, as with anything strategic and core to business success, it is about having a long term view and the backbone to execute, especially when long term results and success will materialize after the next fiscal quarter or year end. Let’s start by removing the KPI for cosmetic band aide initiatives.

About us

Tibor Shanto is a 25-year veteran of B2B sales, Tibor has developed an insider’s hands on perspective of successful sales execution. Called a brilliant sales tactician Tibor shows organizations and sales professionals how to leverage their sales process to shorten sales cycles, increase close ratios, and create double digit growth through execution and using the right combination strategy, tools, metrics, tactical execution of the sales process.